primer on grievanceh

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Primer on GrievanceMachinery and

Voluntary Arbitration

I N T R O D U C T I O N

The Primer answers the numerous questions being asked about voluntary arbitration by parties to labor-management disputes and their arbitrators.

For better appreciation of the subject, the Primer traces first the development of voluntary arbitrationwithin the policy and legal framework of the Philippine labor relations system and explains the meaning ofGrievances and importance of Grievance Procedure as prelude to arbitration.

The various topics on the main subject of voluntary arbitration starting from the selection of voluntaryarbitrators, scope of voluntary arbitration, arbitrability issues, arbitration procedures and techniques, evidence,and voluntary awards and decisions, combine both the law and procedures and their application in various casesdecided by well-known Arbitrators in the United States. In instances where local cases are available, the decisionsof the Philippine Supreme Court are also included. The approach provided a more realistic and practical picture ofhow voluntary arbitration works.

The topic on Arbitration Cost and Special Voluntary Arbitration Fund is included to provide answers to basicquestionsrelative to expenses involved in arbitration proceedings and entitlement to government subsidy.

With the continued support from government, labor and management advocates, voluntary arbitratorsand non-governmental organizations, the Primer ends with a very optimistic note on the future of grievancesettlement and voluntary arbitration in the country.

POLICY AND LEGAL FRAMEWORK

1. What is the present national policy on labor dispute settlement ?The present national policy on labor dispute settlement is enunciated in the following instruments:A. 1987 ConstitutionSec. 3, Article XIII provides:

The State shall promote the principle of shared responsibility between workers and employersand the preferential use of voluntary modes in settling disputes, including conciliation, and shallenforce their mutual compliance therewith to foster industrial peace.B. Labor Code, as amended by Republic Act 6715

Article 211 of the Code provides, among others:(a) It is the policy of the Stateto promote and emphasize the primacy of free collective

bargaining and negotiations, including voluntary arbitration, mediation and conciliation, asmodes of settling labor or industrial disputes.

(b) To provide an adequate administrative machinery for the expeditious settlement of labor orindustrial disputes.

2. What were the early policies adopted by the government on settling labor disputes?


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Philippine labor policy may be said to have evolved over four periods:A. Commonwealth Period (1936-1953)

Commonwealth Act No. 103 established our first labor dispute settlement system by creating theCourt of Industrial Relations and vesting it with compulsory arbitration powers over labordisputes involving both workers in the private sector and in government owned or controlledcorporations. The enactment of CA 103 was pursuant to a provision in the 1935

Constitution, Section 6, Article XIV, which categorically provided the basis for compulsoryarbitration.On the enactment of CA 103, the highly respectedDr. Cicero Calderon had this to say: Theadoption of compulsory arbitration was not the product ofmere impulse or sudden inspiration. It was a deliberate response of the policy-makers to the

social scene characterized by acute agrarian and industrial unrest of disturbingproportions. Strong measures were necessary to check the surging tide of strikes and uprisingsby the tenants and laborers, particularly in rice haciendas and sugar plantations in thecountry. Other factors contributing to the adoption of compulsory arbitration were the poor stateor organization of the workers and farm workers and the resultant lack of effective collectivebargaining; the customary reliance of the Filipino upon courts of justice in the adjudication ofcontroversies of whatever nature; the desire to experiment with compulsory arbitration, whichhad been rejected at least three times under American rule; the apparent inadequacy orineffectiveness of the Government policy of non-intervention in the area of labor-management

relations, and the strong influence of the then President Manuel L. Quezon, who advocated itsadoption before the National Assembly.

B. Industrial Peace Act Period (1953-1972)In 1953, Republic Act No. 875 was enacted fundamentally changing the framework of labor

relations policies from that of compulsory arbitration to collective bargaining. The Act severely restrictedthe compulsory arbitration powers of the CIR. The latter was divested of the power to set wages, rates ofpay, hours of employment, other terms or conditions of employment, or otherwise regulate the relationbetween employers and employees, as a compulsory arbitration body, except in labor disputes involvingindustries indispensable to the national interest.C. Martial Law Period (1972-1986)

It was during the period of martial law that voluntary arbitration became an integral part of thePhilippine labor relations policy. This period also marked by the banning of strikes in the so- called vitalindustries. To cushion the impact of the strike ban, Presidential Decree No. 21 was issued creating theNational Labor Relations Commission, which exercised original jurisdiction over practically all labordisputes. Aside from creating the NLRC, Presidential Decree No. 21 had four other very importantprovisions:

1. It imposed the clearance requirement for dismissals and terminations of employeeswith at least one year of service;

2. It made grievance procedure a mandatory initial stage in the settlement of labordisputes;

3. It provided that before assuming jurisdiction over any issue, dispute orgrievance, the Commission shall give the parties a chance to submit their problem forvoluntary arbitration;

4. To ensure the availability of voluntary arbitrators, the Decree provided that allcollective bargaining agreements shall contain a provision designating a voluntaryarbitrator to decide all disputes and grievances arising out of the implementation of thecollective bargaining agreements.

D. Post-Martial Law Period ( 1986-present)What appears to be the hallmark of this period in so far as labor relations policy is concerned is

the government emphasis on the promotion of voluntary modes of dispute settlement. By virtue ofExecutive Order No. 126 which reorganized the Department of Labor and Employment, the


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National Conciliation and Mediation Board (NCMB) was created to oversee the implementation of theConstitutional policy of promoting the preferential use of the voluntary modes of disputesettlement, including conciliation. Executive Order 251 which amended Executive Order No. 126 likewisecreated the Tripartite Voluntary Arbitration Advisory Council (TVAAC) to advise the NCMB on thepromotion of the voluntary arbitration program.

Republic Act 6715 introduced amendments to the Labor Code with far-reaching effects on thelabor dispute settlement system. One of these is the injunction against the NLRC and the DOLE Regional

Directors from entertaining disputes that are under the original and exclusive jurisdiction of voluntaryarbitrators. Republic Act 6715 also introduced amendments to the Labor Code which strengthened tradeunionism and collective bargaining as essential elements of an effective labor dispute settlement system.

3. Has the new labor relations law strengthened the legal basis of the use of grievancemachinery and voluntary arbitration in settling labor disputes ?

Definitely. Republic Act 6715 now provides for the mandatory use of the grievance machinery as aprerequisite step to voluntary arbitration of disputes arising from CBA interpretation and implementation, as wellas those disputes arising from the interpretation and enforcement of company personnel policies. Article 262 ofthe Labor Code, before it was amended by Republic Act 6715, merely provided that (whenever) a grievancearises from the interpretation or implementation of a collective agreement, including disciplinary actions imposedon members of the bargaining unit, the employer and the bargaining representative shall meet to adjust thegrievance.

Secondly, it is now the policy of the State to encourage voluntary arbitration of all labor-management disputes other than those arising from the interpretation and implementation of collectivebargaining agreement and company personnel policies. This policy is operationalized by the following provisions:

A. Article 260 of the Labor Code, as amended by Republic Act 6715, which provides that: Allgrievances submitted to the grievance machinery which are not settled within seven (7) calendardays from the date of its submission shall automatically be referred to voluntaryarbitration prescribed in the CBA. The seven calendar days shall be reckoned from the date thegrievance machinery is submitted to the last step in the grievance machinery immediately priorto voluntary arbitration.

B. Article 261, which provides for the original and exclusive jurisdiction of voluntary arbitratorsover unresolved grievances arising from the interpretation or implementation of the CBA arisingfrom the interpretation or enforcement of company personnel policies. With thisamendment, the original and exclusive jurisdiction of voluntary arbitrators has beentremendously expanded.

C. Article 261 provides that CBA violations are to be treated as grievances instead of unfairlabor practice acts except when the violation is gross, meaning it involves flagrant and /ormalicious refusal to comply with the economic provisions of the CBA.

D. The same article enjoins the NLRC, its Regional Arbitration Branches, and the RegionalDirectors of the Department of Labor and Employment from entertaining disputes, grievances ormatters under the exclusive and original jurisdiction of the voluntary arbitrator. If any of suchcases is filed before them, they have to immediately dispose and refer the same to the grievancemachinery or voluntary arbitrator provided in the CBA.

E. Moreover, under Article 262, upon agreement of the parties, voluntary arbitrators mayalso hear and decide all other labor disputes including unfair labor practices and bargainingdeadlocks.

F. Lastly, in case issues arising from the CBA interpretation and implementation or those

arising from the interpretation or enforcement of company personnel policies are made asgrounds for notices of strikes or lockouts or requests for preventive mediation, the NCMB shalladvise the parties to submit the issue/s to voluntary arbitration ( Rule XI, Section 2,Implementing Rules, Labor Code).

GRIEVANCES4. What is grievance?


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A grievance is defined as any question by either the employer or the union regarding the interpretation orapplication of the collective bargaining agreement or company personnel policies or any claim by either party thatthe other party is in violation of any provision of the CBA or company personnel policies.5. What is the grievance referred to in Title VII-A of the Labor Code?

The grievance referred to in the technical or restricted sense, is a dispute or controversy between theemployer and the collective bargaining agent arising from the interpretation or implementation of their CBA and/or

those arising from the interpretation or enforcement of company personnel policies, for the adjustment andresolution of which the parties have agreed to establish a machinery or a series of steps commencing from thelowest level of decision-making in the management hierarchy (usually between the shop steward of the employeeor employees aggrieved and the supervisor/ foreman/ manager which exercises control and supervision over thegrievants or who is responsible for executing the management action that have given rise to the grievance) andusually terminating at the highest official of the Company. If such dispute remains unresolved after exhausting thegrievance machinery or procedure, it shall automatically be referred to voluntary arbitration prescribed in the CBA.6. When is there a grievance ?

In the technical or restricted sense, there is a grievance when a dispute or controversy arises over theimplementation or interpretation of a collective bargaining agreement or from the implementation or enforcementof company personnel policies, and either the union or the employer invokes the grievance machinery provision forthe adjustment or resolution of such dispute or controversy.

7. Could there be a grievance without a union or a CBA ?If the term grievance is to be applied in the loose or generic sense, any dispute or controversy respecting

terms and conditions of employment which an employee or group of employees may present to the employer canbe a grievance, even without a union or CBA. Under this interpretation, any complaint, question or problem thatan employee or group of employees may wish to take up or discuss with the employer respecting terms andconditions of employment for the purpose of resolving or satisfying the same, constitutes a grievance. Theexpansion of the original and exclusive jurisdiction of voluntary arbitrators to include questions arising fromthe interpretation and enforcement of company personnel policies has the effect of widening the meaningand interpretation of a grievance to include a situation where there is no collective bargaining agent and no CBA.8. Are all grievances arising from the implementation or interpretation of the collective

bargaining agreement and/or interpretation and enforcement of company personnel policiescompulsory subject to the grievance machinery ?Yes. This is clear from Article 260 and Art. 261 of the Labor Code, as amended by Republic Act 6715.Art. 260 is emphatic on the duty of the parties to a collective bargaining agreement to establish a

machinery for the adjustment and resolution of grievances arising from the interpretation and enforcement of theCBA and/or company personnel policies, and for the mandatory use of the said machinery.

Art. 261, on the other hand, directs the NLRC, its Regional Arbitration Branches and the RegionalDirectors of the Department of Labor and Employment not to entertain disputes, grievances or matters under theexclusive and original jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators and to immediatelydispose of and refer the same to the grievance machinery or voluntary arbitration provided in the collectivebargaining agreement. Moreover, in Rule XI of the Implementing Rules of the Code, the Regional Branches of theNational Conciliation and Mediation Board are enjoined, in case issues arising from the interpretation orimplementation of the collective bargaining agreements or those arising from the interpretation or enforcement ofcompany personnel policies are raised in notices of strikes or lockouts or requests for preventive mediation, toadvise the parties to submit the issue/s to voluntary arbitration.9. What usual provisions of a collective bargaining agreement whose violation/s arising frominterpretation and implementation, may constitute grievance/s or the so-called rights disputes ?

Every collective agreement usually contains non-economic and economic provisions. Non-economicprovisions are those whose monetary cost can not be directly computed such as no-strike-no-lockout, unionsecurity, management security, check-off clauses, grievance procedures, etc. Economic provisions, on the otherhand, are those which have direct and measurable monetary cost consequences such as wage rates, paidvacations, pensions, health and welfare plans, penalty premiums and other fringe benefits. Any violation arisingfrom rights established under collective agreements, laws, rules and regulations and customary practices mayconstitute as grievance and is often referred to as rights dispute.


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10. What are the personnel policies and what are the matters usually covered by such policies,whose wrong from enforcement and interpretation may constitute grievance/s or other sources ofrights disputes?

Personnel policies are guiding principles stated in broad, long-range terms that express the philosophy orbeliefs of an organizations top authority regarding personnel matter. They deal with matters affecting efficiencyand well being of employees and include, among others, the procedures in the administration of wages, benefits,promotions, transfers and other personnel movements which are usually not spelled out in the collective

agreement. The usual source of grievances, however, is the rules and regulations governing disciplinary actions.11. What violations of the usual norms of personnel conduct or behavior of employees mayconstitute grievances often referred to as discipline cases?

Rules and regulations governing personnel discipline may contain the following infractions covering thefollowing subjects:

1. AGAINST PERSONPHYSICAL INJURY, ASSAULT, HOMICIDE, MURDER

2. AGAINST PROPERTYMIS-USE OF PROPERTYDAMAGE TO PROPERTYTHEFT AND ROBBERYNEGLIGENCE IN THE USE OF PROPERTY

3. ORDERLINESS/GOOD CONDUCTFIGHTING/QUARRELINGVIOLATION OF RULESDISCOURTESY/DISRESPECT INTOXICATION WHILE AT WORKPOSSESSION OF DRUGS/NARCOTICS/ALCOHOLIC DRINKS

ILLEGAL STRIKESTRIKE VIOLATIONS/SABOTAGEFAILURE TO COOPERATE IN INVESTIGATIONSHYGIENESAFETYUNION ACTIVITYMOONLIGHTINGDEPORTMENTFINANCIAL INTERESTUNAUTHORIZED OUTSIDE WORKPERSONAL AFFAIRSENTERTAINMENT OF VISITORSDISORDERLINESS, HORSEPLAYUSE OF FOUL LANGUAGE

4. ATTENDANCE AND PUNCTUALITYTIMEKEEPING VIOLATIONSABSENTEEISMTARDINESSUNDERTIMEAWOL

5. MORALITYIMMORALITYSEXUAL HARASSMENT

6. CONFLICT OF INTERESTCONFLICT OF INTEREST

7. NON-PERFORMANCEINSUBORDINATION NEGLIGENCE OF DUTYINEFFICIENCYMALINGERINGCARELESSNESSPOOR QUALITY


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8. HONESTY/INTEGRITYFALSITY/FALSIFICATIONFRAUDDISHONESTYBREACH OF TRUSTUNFAITHFULNESS LOSS OF CONFIDENCEUSURIOUS TRANSACTIONDISCLOSURE OF INFORMATIONDISLOYALTYNON-PAYMENT OF DEBT

THE GRIEVANCE PROCEDURE12. What is the Grievance Procedure ?

The grievance procedure is the series of formal steps that parties to a collective bargaining agreementagreed to take for the adjustment of grievances or questions arising out of the interpretation or implementation ofthe CBA or company personnel policies including voluntary arbitration as the terminal step. The grievanceprocedure provides the parties a first crack in addressing problems in the CBA administration and its use is anessential requisite before a voluntary arbitrator can take cognizance of the unresolved grievance. It usually consistsof a multi-step procedure starting from or discussion of the grievance between the employee and/or the Union

Steward on the one-hand and the foreman and supervisor on the other hand, and ending with the highest decision-making officials of the company, reflecting the hierarchy of command or responsibility.

Legally speaking, the grievance procedure is an appeal procedure and is a must provision in everycollective agreement. It is that part of the agreement which provides for a peaceful way of settling differences andmisunderstanding between the parties.13. Are there minimum legal requirements for the establishment of the grievance procedurereferred to in Title VII-A of the Labor Code?

Yes. The following are the minimum legal requirements:1. The grievance machinery established by the parties should be sufficient to ensure mutual

observance of the CBAs terms and conditions, for the resolution and adjustment of grievancesarising from the CBA interpretation or implementation; and those arising from the interpretationor enforcement of company personnel policies;

2. The parties should include in the agreement a procedure for the selection of voluntaryarbitrator or panel of voluntary arbitrators or name and designate in advance a voluntaryarbitrator or panel of voluntary arbitrators.In most collective agreements, the provision of Grievance Procedure contains: 1) definition of

grievance, 2) statement of guiding principles in the resolution of grievances, and 3) procedural steps inthe settlement and resolution of grievances.

14. Can there be a collective bargaining agreement entered into by the parties and later on dulyregistered with the DOLE which does not provide for a grievance procedure ?

Legally, none. A grievance procedure is a must provision in any CBA and no collective agreement can beregistered in the absence of such procedure. In the event that a CBA without such provision is submitted forregistration, the registrar shall advise the parties to include a grievance procedure the CBA is considered dulyregistered.15. What standards may used as guides in formulating an effective grievance procedure?

The following standards are suggested in the formulation of effective grievance procedure:1. Collective bargaining agreements should contain provisions that grievances and disputes

involving the interpretation or application of the terms of the agreement are to be settled withoutresort to strikes, lockouts, or other interruptions to normal operations by an effective grievanceprocedure with arbitration as its final step.


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2. To be effective, the procedure established for the settlement of such grievances and disputesshould meet at least the following standards:a. The successive steps in the procedure, the method of presenting grievances or

disputes, and the method of taking an appeal from one step to another should be soclearly stated in the agreement as to be readily understood by all employees, unionofficials, and management representatives .

b. The procedure should be adaptable to the handling of various types of grievanceand disputes which come under the terms of the agreement .

c. The procedure should be designed to facilitate the settlement of grievances anddisputes as soon as possible after they arise. To this end:1. The agreement should provide adequate stated time limits for the

presentation of grievances and disputes, the rendering of decisions, and thetaking of appeals.

2. Issues should be clearly formulated at the earliest possible moment. In allcases which cannot be settled in the first informal discussions, the positions ofboth sides should be reduced to writing.

3. Management and union should encourage their representatives to settle at

the lower steps grievances which do not involve broad questions of policy or ofcontract interpretation and should delegate sufficient authority to them toaccomplish this end.

4. Provision should be made for priority handling of grievances involvingdischarge, suspension, or other disciplinary action.

d. The procedure should be open to the submission of grievances by all parties to theagreement.

3. Management and unions should inform and train their representatives in the properfunctioning of the grievance procedure and in their responsibilities under it. In such a program, itshould be emphasized:a. That the basic objective of the grievance procedure is the achievement of sound

and fair settlements and not the winning of cases;b. That the filing of grievances should be considered by foreman or supervisors as aids

in discovering and removing causes of discontent in their departments;c. That any tendency by either party to support the earlier decisions of its

representatives when such decisions are wrong should be discouraged;d. That the willingness of management and union officials to give adequate time and

attention to the handling and disposition of grievances and dispute is necessary to theeffective functioning of the procedure;

e. That for sound handling of grievances and disputes both management and unionrepresentatives should be thoroughly familiar with the entire collective bargainingagreement.

16. What are the usual steps in the Grievance Procedure ?A grievance procedure usually consists of a series of steps to be taken within the specified time limits. The

nature of the procedure will depend upon the structure of the company and on the needs and desires of the parties,but there is a tendency to follow a fairly definite pattern. Small companies can be expected to have short, simplegrievance procedures, sometimes with only one or two steps. Larger companies usually have multi-step procedures.Three-step and four-step procedures probably are most common.

Commissioner Jesus B. Diamonon of the Tripartite Voluntary Arbitration Advisory Council elaborated thatthe reason for having a number of steps is to provide a method of appeal to higher authority from the decision of alower supervisory official. Each step is as important as the other. The intermediate steps are not merely a


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transmission belt for passing grievances along to the top authorities. The representatives therein as in any othersteps must have adequate authority either to uphold or reverse decisions made at the lower level.

According to him, the grievance procedure has two (2) periods: the period of persuasion, from the first stepto the last step immediately prior to arbitration, where labor and management, with the use of arguments andevidence, persuade one another to give in to ones position or agree to a compromise, and the period of arbitrationwhich begins when the act of persuasion has been exhaustively used and no settlement has been reached. Once andfor all, the dispute must be resolved and the parties will have to persuade the arbitrator for a favorable decision or

award.17. What is the interrelationship between the grievance procedure and voluntary arbitration ?

Professor Fernandez quotes Bernstein :It is of vital importance that the interrelationship of the two procedures-grievance and arbitration-be borne

in mind by those who study and practice arbitration. A grievance procedure in which few disputes are settledinevitably overloads arbitral machinery. Arbitration procedures and awards that undermine the grievance machineryby permitting serious disregard of its prescribed procedures can invite more arbitration and fewer settlements bynegotiation. Or arbitration that encourages overemphasis on technical procedural requirements will thwartsettlement on the merits so that pressure builds for resort to self-help. Obviously the balance to be struck requires

judgment, preeminently on the part of the representatives of unions and management, who have initial and primaryresponsibility. How they discharge their functions may be affected by what arbitrators do. Arbitration is a powerfultool that can, on occasion, send reverberations through the larger organism, the grievance procedure and shop

office relations18. What are the advantages and disadvantages of fewer stages in the grievance procedure?

The advantages of fewer stages in the grievance procedure are (1) greater speed in processing, and (2)savings in personnel time. Its disadvantages are (1)vulnerability to grievance overload; (2) excessiveinvolvement of senior officials and (3) inadequate consideration of the merits by lower level supervisorswho are in a much better position to make an effective adjustment.

19. What are the advantages and disadvantages of a multi-stage procedure?The multi-stage procedure has the following advantages: (1) it enables the management-supervisory

personnel at all levels to contribute their know-how to the adjustment of grievances; (2) a more adequateconsideration of the grievance is likely; (3) involvement of senior officials in grievance processing, is greatlyreduced, thereby freeing them for other managerial tasks.

Its disadvantages are: (1) it is wasteful of personnel time and effort and (2) it is less expeditious. 20. What should be the proper attitude of parties to the Grievance Procedure?

The parties attitude in handling grievances, probably more than in any other aspect of the labor-management relationship, indicates their good faith. Nowhere in that relationship is mutual good faith moreimportant. The attitude of the parties is even more important than the type of grievance provisions contained in theagreement. This view has been shared by unions and management alike in most cases in which the grievanceprocedure has been considered successful and in the majority of cases in which the procedure has broken down.Good grievance machinery is important, but such machinery alone will not insure success. The attitude, judgment,experience and training of the individuals involved are of prime importance. Moreover, a desire to settlegrievances, rather than to win them, is essential.21. What is the responsibility of the union stewards and foreman in handling grievances?

Union stewards and foreman must see to it that grievances are presented only when there is a real basis forcomplaint or there is a need for a decision. If stewards are convinced that the worker does not have a real case, it isbetter to tell him so right from the beginning. In borderline cases where it is felt that the worker has considerable

justice on his side, he should be told of the uncertainty of the decision before the case is processed to get a definiteruling through the grievance procedure.

Foreman, on the other hand, should be trained in the human relations aspects of their jobs. They should beready to listen first before they start debating with the employee. They should note what is being said rather thanhow the matter is said. This way, gripes are separated from grievances, or gripes are prevented from becominggrievances.


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Both stewards and foreman should make every effort to settle grievances at the lowest step. Managementhas a legal duty to provide all information that will explain the specific details and basis ot its action to enable theshop steward to determine whether to proceed with the grievance. 22. May parties to a collective bargaining agreement stipulate that certain matters or questions

arising under the contract be exempt from the grievance procedure? The Labor Code fixes the scope or coverage of the grievance procedure and voluntary arbitration in Article

261, to wit: The voluntary arbitrator or panel of voluntary arbitrators shall have original and exclusive jurisdiction to

hear and decide all unresolved grievances arising from the interpretation or implementation of the collectivebargaining agreement and those arising from the interpretation or enforcement of company personnel policiesreferred to in the immediately preceding Article. Accordingly, violations of a collective bargaining agreement, exceptthose which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved asgrievances under the collective bargaining agreement. For purposes of this Article, gross violations of a collectivebargaining agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of suchagreement.

The Commission, its Regional Offices and the Regional Directors of the Department of Labor andEmployment shall not entertain disputes, grievances or matters under the exclusive and original jurisdiction of thevoluntary arbitrator or panel of voluntary arbitrator or panel of voluntary arbitrators and shall immediately disposeand refer the same to the grievance machinery or voluntary arbitration provided in the collective bargaining

agreement.It is the law which confers to voluntary arbitrators their original and exclusive jurisdiction and the parties

cannot diminish their jurisdiction by stipulation as this would conflict with the basic directive of the Labor Code.23. May questions concerning terms and conditions actually obtaining but not referred to in theCBA, although provided for in company manuals or policy statements, be subject to the grievanceprocedure?

With the expansion of the scope of the original and exclusive jurisdiction of voluntary arbitrators to includequestions arising out of the interpretation or implementation of company personnel policies, the answer to theabove is decidedly yes.

But even before this expansion of jurisdiction brought about by RA 6715, under the theory of impliedincorporation, existing terms and conditions, though not dealt with in specific provisions, were already deemed partof the agreement and thus, grievable.

Fernandez quotes Cox and Dunlop in explaining the so-called theory of implied incorporation:A collective bargaining agreement should be deemed, unless an intention is manifest, to carry forward for

its term the major terms and conditions of employment not covered by the agreement, which prevailed when theagreement was executed.24. How is grievance presented ?

Grievances ordinarily are brought by the aggrieved employee, usually with the union representative calledthe shop steward or grievance officer, to the foreman either orally or in writing. Usually a Grievance Form isprovided for the purpose. If no settlement is reached at first level, the aggrieved employee or the grievance officermay bring the grievance through the successive steps in the grievance procedure provided for in the CBA.

As mandated by the Labor Code, as amended by Republic Act 6715, all grievances that remain unresolvedafter exhausting all the internal procedures shall automatically be referred to voluntary arbitration prescribed in

the CBA if they are not settled within seven (7) days from the date of its submission to the last step in the internalgrievance machinery.25. Who can file a grievance ?

Generally, employees initiate a grievance. This is recognized by Article 255 of the Labor Code whichprovides, among others, that an individual employee or group of employees shall have the right at any time topresent grievances to their employer.

Secondly, the grievance procedure being part and parcel of the continuous collective bargaining processand the union designated or selected by the majority of the employees being their exclusive bargaining


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representative, unions are generally recognized as having the right to initiate, file or present a grievance, eitherwith regard to their rights as unions under the contract, or with regard to the rights of employees, whethercollective or individual.

Thirdly, while employers do not as a general rule initiate a grievance, it would be prudent to include aprovision in the CBA granting the employer such right, especially in cases where the employer may wish to use thegrievance machinery to resolve a question over a vague or indefinite provision of a CBA.26. How are grievance processed ?

Professor Fernandez suggests the following approach in the processing and adjustment of grievances:Processing of grievances involves a joint effort on (1) identification of the issue or issues involved (2)

developing its factual basis or background (3) determining the contract provisions involved (4) evaluating the meritsof the grievance in the light of the factual background and applicable rules and (5) working out a fair and justsettlement.27. What preparations should be undertaken in order that the grievance can effectively be presentedby the grievant?

The Trade Union Congress of the Philippines in its Manual for Shop Stewards recommends the followingsteps in preparing for the presentation of a grievance:

1. Determine first if there is a genuine grievance and if there is, whether the same isjustified or not. Has the contract been violated? Has the worker been treated unfairly by someaction of the company? Is the employer responsible? Is the problem covered by the contract orpersonnel policies in any way?

2. Study the CBA and company personnel policies. A Steward or a grievant who is notfamiliar with the CBA and company personnel policies is like a navigator without a compass. Mostgrievances are contract violations and if the steward or the grievant does not know the contract orthe company personnel polices, he will not recognize a violation when he sees one.

3. Get all facts of the case.Be sure to investigate the five Ws the WHO, WHEN, WHERE,WHY and WHAT.

WHO, refers to that part of the form that clearly identifies the worker with the grievance. On thisform is included: 1)employees name, 2) clock number (or chapa number) 3) department,4) shift, 5) classification.

WHEN, refers to the time element. Often, information regarding more than one date is needed to properlycomplete the form: 1) the date on which the grievance is officially written, 2) the timeand date on which the grievance actually happened, 3) the date on which the grievancewas filed in the first step with the foreman, and 4) the date on which the foreman gavehis decision. It is particularly important in matters involving back pay that all dates beclearly stated.

WHERE, refers to the exact place where the grievance took place-the department aisle, or miracle.WHY, refers to the reasons why the complaint is considered a grievance. This is the heart of the

grievance and should be written under the section that carries the heading "Nature ofGrievance. It is important to remember that it is possible to have a legitimate grievancewithout being able to point to a violation of a specific clause of the contract.

WHAT, refers to what should be done about the grievance the settlement desired. Many grievance

forms do not have a separate section headed, Settlement Desired. In those cases,, it iscustomary for the Steward to list his settlement request at the end of the section Natureof Grievance. It is extremely important that this be done si nce an arbitrator will oftenbase his award solely on the original request.

4. Discuss the grievance with the Union or other stewards in order to learn how thecontract should be interpreted and what kind of settlement or adjustment will be demanded. 5. It may be important to know about past grievance settlements of similar nature as the grievance tobe presented.


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28. What preparations should be undertaken by the respondent and his advocates in a grievanceto effectively present his action such that they may be understood and appreciated?In the same manner that a grievant or a steward has to prepare for the presentation of a grievance, the

employer and his advocates down the line in the management hierarchy, has to prepare its defense of its actionwhich gave rise to the grievance. They must also prepare by getting all the facts. If it was a disciplinary action ,what has the grievant done to deserve the disciplinary action? When? Where? It is the employer who will have theburden of proof in justifying its action after the grievant and /or the Union has presented the grievance.

The employer or respondent has to be thoroughly familiar with the CBA and its own personnel policies.Although the administration of the CBA is a joint effort between the Union and the employer, the primary source orthe originator of these policies is the employer and he is therefore expected to be more well-versed with theprovisions of the CBA and its own personnel policies.

The employer must be ready to justify its action and convince the union or grievant of its reasonablenessand fairness. He may point to a clear CBA provision as the legal basis of its action. He may refer to a knowncompany policy or practice that has been clearly and manifestly violated by the grievant or he may point toprecedents of similar grievances that were resolved or adjusted in favor of the employer.

The bottom line is: if both parties agree to the facts, the road ahead is much clearer and wider.29. What remedy is available to a party if the other refuses to attend or appear in the grievancehearing?

Art. 252 of the Labor Code prescribes attendance in grievance hearings as part of the parties duty tobargain collectively, to wit:

The duty to bargain collectively means the performance of a mutual obligation to meet and convenepromptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hoursof work and all other terms and conditions of employment including proposals for adjusting any grievances orquestions arising under such agreement and executing a contract incorporating such agreements if requested byeither party, but such duty does not compel any party to agree to a proposal or to make any concession.

Any party guilty of non-attendance may therefore be charged of unfair labor practice, pursuant to Art. 248(g) or Art. 249 . The other party may, as a matter of choice, file request for preventive mediation or a notice ofstrike with the NCMB, or file a ULP charge with the NLRC but not simultaneously. Art. 264 enjoins a strike or lockoutover a dispute that has been certified or submitted to compulsory or voluntary arbitration or during the pendency ofcases involving the same grounds for the strike or lockout.

The other school of thought presents this proposition: Non-attendance in grievance hearings implies thatthe non-attending party is not convinced that the grievance machinery will be useful or effective in adjusting orresolving the grievance and that, therefore, he is deemed to have dispensed with the preliminary step to voluntaryarbitration. Under this theory,, the parties may then be deemed to have submitted the grievance to voluntaryarbitration.30. May a union go on strike over an unfair labor practice act despite a no strike/no lockoutprovision in the CBA providing for the resolution of such dispute through the grievance procedure andvoluntary arbitration? Is such a CBA provision providing for arbitration in case of ULP by either partyvalid?

There are two conflicting decisions of the Supreme Court on this matter.One, promulgated on May 15, 1979, in the case of Philippine Metal Foundries, Inc., vs. CIR, et.

al, declared that a no strike prohibition in a Collective Bargaining Agreement is applicable only to economicstrikes. In other words, ULP is not covered and workers may go on strike based on ULP despite the no strike

provision.The other, issued on September 10, 1979, in the case ofGOP-CCP Workers Union vs. CIR, which

pronounced as not illegal the stipulation in the collective bargaining agreement that in case of any alleged unfairlabor practice on the part of either party, there will be no strikes, lockouts, or prejudicial action until the questionor grievance is resolved by thee proper court if not settled through a grievance procedure therein outlined.

In the light of the fact that the latter case is more recent and in view of the present state policy ofpreference for voluntary modes of dispute settlement, it is submitted that the latter decision is more conducive toindustrial stability, unless the Unfair Labor Practice act of the company is so gross and so patent as to threaten theexistence of the union.


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SELECTION OF VOLUNTARY ARBITRATOR31. What general considerations should guide the parties in their choice of a voluntary arbitrator?

The choice of an arbitrator must take into account the following general considerations: 1) field of choice,or the problem of availability of desired persons; 2) legal qualification; 3) legal disqualification; and 4) criteria andattributes of a suitable arbitrator.32. What attributes or criteria should a voluntary arbitrator possess?

Every arbitrator must possess certain attributes that make him acceptable to the parties interested innaming him as arbitrator: 1) he must be without prejudice or bias, 2) he must be intelligent, 3) he must be capableof exercising sound judgment, 4) he must be immune to pressures from parties to the dispute and from others, 5)he must be experienced in the field of labor relations.33. What are some established indicators of acceptability of an arbitrator to the parties?

Referring to Seitz. P. So you Want To Be an Arbitrator, quoted Professor Fernandez listed the followingindices of acceptabilities:

1. highly knowledgeable and has had significant experience in the field of labor law, laborrelations, personnel management and union problems;

2. has the capacity to run a hearing fairly and competently and command respect in his role;3. is sensitive to and understands the needs of the parties insofar as a decision is concerned

and the articulation of the reasons upon which it is based; 4. has a reputation in the industrial and union community for fairness and impartiality and,5. because of character, can be depended upon not to depart from the ethical standards which

arbitrators impose upon themselves.Other salient attributes based on survey of management and union attitudes were also listed: 1) decisions are based on the facts of the specific case2) highly consistent rulings3) broad viewpoint4) submits a detailed justification of the decision5) develops pertinent information through questioning in the hearing (King B., Management

and Union Attitude Affecting the Employment of the Inexperienced Labor Arbitrator) In another study, Davey. H.. How Arbitrators Decide Cases. The list consisted of the following: 1) personal integrity2) judicial self-detachment3) some knowledge of labor relations4) reasonably high level of intelligence, combined with analytical ability, humor, patience, and

all other good things.34. Who are available for appointment/selection as voluntary arbitrator in the Philippines?

While in most industrial countries, there are three types of arbitrators available: 1) the professionalarbitrators; 2) persons who, without being professional, often serve as arbitrators, and 3) amateurs, in thePhilippines, those available for selection/appointment are those who belong to the second and third categories. Thelist of accredited voluntary arbitrators of the National Conciliation and Mediation Board available for appointmentconsists of persons engaged in full time work as employees and officials in the Government. Educational, civic andreligious institutions, trade union organizations and private enterprises. They are either members of the ArbitrationAssociation of the Philippines (AAP) or the Philippine Academy of Professional Arbitrators (PAPA), whose bonafidemembership in those organizations automatically for accreditation. Others are individual applicants who meet thefollowing minimum criteria for accreditation:

1. Must be a Filipino citizen residing in the Philippines.


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2. Must be holder of a Bachelors degree in any field of behavioral or applied sciences or

equivalent educational trainings short of a Bachelors Degree;3. Must have at least five (5) years experience in labor-management relations;4. Must have completed a training course on voluntary arbitration conducted by the Board;5. Must be a person of good moral character, noted for impartiality, probity, and has not been

civilly, criminally and administratively adjudged guilty of any offense involving moral turpitude asevidenced by a duly sworn affidavit;

6. Proficient in oral/written communication both in English and Tagalog.Under the Professional Development Plan for Accredited Voluntary Arbitrators, the following minimum

requirements for accreditation were set:1. Must be a Filipino citizen, residing in the Philippines2. Must be a holder of a Bachelors degree in any field of behavioral or applied sciences or equivalent

educational training short of a Bachelors degree;3. Must have at least five (5) years experience in the field of labor-management relations; and4. Has not been convicted of any crime involving moral turpitude.

35. If individual applicant, how does one apply for accreditation with the NCMB?Under the Voluntary Arbitration Accreditation System (VAAS), the applicant shall submit an application

letter with the NCMB or any of its Regional Branches, together with:1. An updated bio-data;2. Two (2) copies) of 2x2 black and white picture;3. School records (transcript of records with Special Order No. or equivalent certification from school),

certifying that applicant has satisfactorily complied the degree indicated in the bio-data;4. Certificate of Employment from present employer(if applicable);5. Affidavit stating that Applicant has not been convicted of any crime involving moral turpitude; and6. Names of three (3) character references who can attest to applicants character, stature and

experience in the field of labor-management relations.After the screening of his qualifications by the NCMB and after completion of the background-reference

check with regard his stature and experience in the field of labor-management relations, the applicant will beinformed accordingly whether he satisfies the minimum requirements or not.

Applicants who meet the minimum requirements will undergo a panel interview to be conducted by theAccreditation Committee. After passing the panel interview, he will be advised to attend a Pre-AccreditationTraining program to equip him with the basic knowledge, skills and orientation necessary for him to dispatch theresponsibilities and functions of an accredited voluntary arbitrator.

After the completion of the Pre-Accreditation Training Program, the applicant will undergo apprenticeship to

expose him to actual arbitration proceedings as conducted by a seasoned Accredited Voluntary Arbitrator and toenable him to exercise the knowledge, skills and orientation he acquired from the Program in an actual arbitrationsession, under the supervision of the said AVA.

Upon satisfactory completion of all the phases of the VAAS, the new AVA will be given his Certificate ofAccreditation bearing his Accreditation Number, and hereafter will formally take his Oath of Office and sign the Rollof Accredited Voluntary Arbitrators.36. Why should voluntary arbitrators seek accreditation with the NCMB?


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By seeking accreditation with the NCMB, accredited voluntary arbitrators are given more opportunity to beselected by the parties who have not named permanent arbitrator in their CBA, especially if those parties seek theassistance of the NCMB in the selection or appointment of an arbitrator. In cases like this, the NCMB will utilize thelist of accredited voluntary arbitrators for purposes of selection and appointment.

Moreover, accredited arbitrators are primary beneficiaries of training programs conducted by the Board andrecipients of all information, education and communication (IEC) materials which are available without cost.37. How are voluntary arbitrators chosen? What are the variety of methods in the selection of arbitrator?

Parties in general may choose between the use of a temporary or permanent arbitrator. They have also achoice as to the number of arbitrators to be used, either single or panel of arbitrators or the so-called ArbitrationBoard.

The most highly desirable method of selection is by mutual agreement of the parties. Other alternativemethods include the election or appointment by an administrative agency like the NCMB.

38. How is a temporary or ad hoc arbitrator distinguished from permanent arbitrator?Temporary or ad hoc arbitrator is selected after dispute arises. He is named to arbitrate a specific dispute or

a specific group of disputes, and there is no commitment to select him again. Permanent arbitrator on the otherhand, is one who is selected to serve for a period of time usually during the life of the CBA, rather than for just one

case or specific group of cases.38. What are the advantages and disadvantages in the designation of temporary arbitrators?

Permanent arbitrator?It is conceded that possibility of easy change of arbitrators is one of the chief advantages of the use of

temporary arbitrators. If parties are satisfied and the arbitrator is available, he can be selected again and again. Forparties with relatively few disputes, appointment of ad hoc arbitrators answer for economy and likewise permitsselection of arbitrators possessed of special qualification and technical expertise needed in each case. Moreover, thetemporary nature of his appointment lessens the bias that is likely to result from his personal acquaintance withboth parties.

Appointment of permanent arbitrator augers well for continuing stability in relationship, consistency inpolicy and development of established jurisprudence and mutually acceptable procedures, that can save on time andnaturally, on cost. Being named in advance, no time is lost in selecting a permanent arbitrator after the disputearises and difficulty in selection is avoided through the highly desirable method of mutual choice by the parties.40. How is a Tripartite Arbitration Board constituted and what are its advantages anddisadvantages?

The Board, which may either be temporary or permanent, is made up of one or more members selected bymanagement and equal number selected by labor, and a neutral member who serves as chairman . The impartialmember acts like a single arbitrator and partisan members serve as parties representatives.

Tripartite boards do not often reach unanimous decisions and in most CBAs, a majority award becomesfinal and binding. The side whose position is favored by the neutral member generally joins the neutral in a majorityaward, with the right to dissent reserved to the other party representatives.

In a tripartite board, the neutral member is provided with the able advice and assistance the partisanmembers, keeping him adequately informed of the parties real positions which may not be exactly the same astheir formal positions. The use of a tripartite board is most advisable in the arbitration of interest disputes. Butbecause of the possible delay in the appointment of partisan members, in the hearing of the case, in writing of

majority and dissenting opinions, many parties prefer not to use tripartite boards for rights disputes.

41. How may the NCMB assist the parties in the selection of arbitrators?To facilitate selection, the Board will send/provide the parties with a list of names of accredited voluntary

arbitrators from its Roll. The parties will have the privilege to cross off names objected to and to indicate preferencefrom the remaining names in the list. The Board then makes the appointment upon the request of the parties fromthe remaining names on the list in the order of preference. If the parties fail to agree on any of the names


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submitted, they may request for additional lists. If they still cannot agree, the NCMB shall appoint an arbitrator notappearing on the list.42. Do existing laws, rules and regulations in the Philippines provide for the qualifications, attributes,functions, role and extent of authority of voluntary arbitrators?

YES. Republic Act 6715 and its Implementing Rules and the NCMB Procedural Guidelines in The Conduct ofVoluntary Arbitration Proceedings provide the basic legal and procedural requirements in handling voluntary

arbitration cases. The NCMB Code of Professional Responsibility for Accredited Voluntary Arbitrators of Labor-Management Disputes likewise defines the arbitrators qualifications, their responsibilities to the profession, to theparties and to the administrative agency in the performance of their functions.43. Can any of the parties request the replacement of a voluntary arbitrator on such grounds as patentpartiality or gross ignorance of the law?

The matter of inhibiting a voluntary arbitrator or requesting his replacement is better addressed to thesound discretion of the voluntary arbitrator himself. Unless the arbitrator is someone chosen for the parties by theNCMB precisely because they have disagreed on the choice earlier, the question of lack of trust and confidence inthe impartiality of the voluntary arbitrator is rarely brought at issue because the parties have presumablythoroughly screened the educational and ethical background of the arbitrator before appointing him as theirarbitrator.

Whether chosen by the parties or appointed for them by the NCMB, it would be well for the arbitrator to

disclose any possible conflict of interest due to pecuniary ties or those arising out of ties of consanguinity or affinitywith any of the parties before hearing the merits of the case.SCOPE OF VOLUNTARY ARBITRATION44. What are the types of labor disputes that may be submitted to voluntary arbitration?

Under Article 261 of the Labor Code, as amended, the following disputes are subject to the original andexclusive jurisdiction of voluntary arbitrator or panel of voluntary arbitrators: 1) unresolved grievances arising fromCBA interpretation or implementation. These include CBA violations which are not gross in character, meaning,flagrant and/or malicious refusal to comply with the economic provisions of the CBA; 2) unresolved grievancesarising from personnel policy enforcement and interpretation including disciplinary cases. These disputes are oftenreferred to as rights disputes.

Under Article 262 of the same Code, all other labor disputes including unfair labor practices and bargainingdeadlocks may also be submitted to voluntary arbitration upon agreement of the parties. Bargaining deadlocks are

often referred to as interest disputes.Article 263 (h) likewise allows the parties upon agreement, to submit even the so-called national interest

cases to voluntary arbitration, before or any stage of the compulsory arbitration process prior to the submission ofthe resolution.

Republic Act Nos. 6727 and 6971 enacted on 7 July 1989 and 22 November 1990, respectively, alsoexpanded the jurisdiction of voluntary arbitration to include: 1) all unresolved wage distortion cases as a result ofthe application of wage orders issued by any Regional Tripartite Wages and Productivity Board in establishmentswhere there is collective bargaining agreement or recognized labor union, and 2) all unresolved disputes, grievancesor other matters arising from the interpretation and implementation of a productivity incentives program whichremains unresolved within twenty (20) calendar days from the time of the submission to labor-managementcommittee.45. How are interest disputes distinguished from rights disputes?

The US Supreme Court has explained the fundamental distinction as follows:The first relates to disputes over the formation of collective agreements or efforts to secure them. They

arise where there is no such agreement or where it is sought to change the terms of one, and therefore the issue isnot whether an existing agreement controls the controversy. They look to the acquisition of rights for the future, notto assertion of rights claimed to have vested in the past.

The second class, however, contemplates the existence collective agreement already concluded or, at anyrate, situation in which no effort is made to bring about a formal change in terms or to create a new one. Thedispute relates either t o the meaning or proper application of a particular provision with reference to a specificsituation or to an omitted case. In the latter event the claim is founded upon some incident of the employment


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relation, or asserted one, independent of those covered by the collective agreement ***. In either case the claim isto rights accrued, not merely to have new ones created for the future.46. What is arbitrators function in rights disputes? In interest disputes?

In general, the function of the rights arbitrator is quite similar to that of court in construing contract. Thefunction is basically that of adjudication rather than legislation. The parties very frequently provide that thearbitrator shall have no power to add to, subtract from, or modify any provision of the agreement.

In United Steelworkers v. Enterprise Wheel and Car Corp., 80 Ct. 1358, 1361, the Supreme Court bluntlyconfined arbitrators to the function specified by the parties:

When an arbitrator is commissioned to interpret and apply the collective bargaining agreement, he is tobring his informed judgment to bear in order to reach a fair solution of a problem.

This is especially true when it comes to formulating remedies. *** Nevertheless, an arbitrator is confined tointerpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand ofindustrial justice. He may of course look for guidance from many sources yet his award is legitimate only so long asit draws its essence from the collective bargaining agreement. When the arbitrators words manifest an infidelity tothis obligation, courts have no choice but to refuse enforcement of the award.

In interest disputes, the arbitrators role is that of legislator or bargainer for the parties. As explainedby Arbitrator Emanuel Stein, the task is more nearly legislative than judicial. The answers are not to be found

within the four corners of a pre-existing document which the parties have agreed shall govern their relationship.Lacking guidance of such a document which confines and limits the authority of arbitrators to a determination ofwhat the parties had agreed to when they drew up their basic agreement, our task is to search for what would be, inthe light of all the relevant factors and circumstances, a fair and equitable answer to a problem which the partieshave been able to resolve by themselves.

Interest arbitrator supplements the collective bargaining process by doing the bargaining for both partiesafter they have failed to reach agreement through their own bargaining efforts. In carrying out this function aslegislator or bargainer for the parties, interest arbitrator must strive to achieve a workable solution. Quoting Soule,Wage Arbitration, 6-7 (1928), Elkouri states: (The arbitrator is) not a superior sort of dictator, dispensing justicefrom on high, but an agent of the two sides to the collective bargaining. His job is to reach a solution that will besatisfactory enough to be workable. He has to take into consideration their relative strength and their relativenecessities. He has to remember not to depart so far from a possible compromise, consistent with the respectivepower and desires of the parties, that one or the other of them will be likely next time to prefer open hostility topeaceful settlement. He has also to remember that a decision is useless if it cannot be enforced and that the powerand ability of the respective parties to administer a decision successfully is an integral part of the decision itself.

A decision which cannot be carried into effect or which will create lasting dissatisfaction is not really adecision at all. On this account a wage arbitration is not an exercise in pure reason and a summary of merely logicalarguments, accompanied by the opinion accompanying the decision, does not tell the whole story. Arbitratorsfrequently do not, ofcourse, fully understand these limitations the more successful ones do so.ARBITRABILITY ISSUES:47. Can a grievance be brought to voluntary arbitration without passing through the grievanceprocedure under the CBA?

This appears to be prescribed by the Labor Code which directs the parties to a CBA to establish agrievance machinery for the adjustment and resolution of grievances arising from the interpretation orimplementation of their CBA and those arising from the interpretation or enforcement of company personnelpolicies.

In view, however, of the State policy to encourage voluntary arbitration of all other labor-managementdisputes, it is submitted that a grievance may be brought directly to voluntary arbitration without passing throughthe grievance machinery, especially when the latter has been proven to be ineffective in the past, or when theparties inadvertently railed to include a grievance machinery provision in their CBA.48. If a grievance is brought to arbitration, could any party add issues other than the grievanceitself?

Since the labor policy encourages the settlement or resolution of all issues or irritants in the labor-management relationship as a means of promoting industrial stability, it is submitted that a party to a voluntaryarbitration case can add issues other than the grievance, provided it does not give undue advantage to one and


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cause prejudice to the other. The party wishing to add other issues must inform the other party and seek hisconformity.

The other situation which could allow an issue to be added is when after the grievance has beenpresented, it was discovered that it was linked or interrelated to another issue not previously resolved and theresolution of the latter is necessary to the final determination of the grievance.49. What are arbitrability issues and when may they arise?

Issues of arbitrability are those that may be raised by any of the parties to an arbitration case on any ofthe following grounds:

1. that the case does not involve any of the disputes that are covered by the arbitrationclause;

2. that while covered by the arbitration clause, some conditions precedent such as theexhaustion of the grievance procedure, or timely notice of intent to arbitrate has not been met.

When an existing dispute is taken to arbitration by a joint submission of the parties, ordinarily there is noproblem of arbitrability since the submission by the parties identify the dispute and agree to itsarbitrability. However, when only one party initiates arbitration by filing a notice of intent to arbitrate under thearbitration clause he agreement, the other party may raise issues of arbitrability.50. Who decides the issue of arbitrability?

The determination of arbitrability is often left by the parties to the arbitrator or to the administrativeagency like the NCMB in lieu of the court. The parties can specifically provide in the agreement the properauthority to decide the issue of arbitrability. Even in the absence of such provision, it is an accepted principle thata preliminary decision relating to arbitrability by an arbitrator is an inherent parts of his duty.ARBITRATION PROCEDURES AND TECHNIQUES

51. In general, what is the extent of the authority of an arbitrator?As a general rule, the authority of an arbitrator embraces or covers the following:

1. General authority to investigate and hear the case upon notice of the parties and to renderan award based on the contract and record of the case;

2. Incidental authority to perform all acts necessary to an adequate discharge of his duties andresponsibilities like setting and conduct of hearing, attendance of witnesses and proof documentsand other evidences, fact-finding and other modes of discovery, reopening of hearing, etc.;

3. Special power in aid of his general contractual authority like the authority to determinearbitrability of any particular dispute and to modify any provision of existing agreement uponwhich a proposed change is submitted for arbitration.

52. Who determines the arbitration procedures that may apply in a given case?In practice, it frequently happens that in a given case, some of the procedures used are based upon the

legal requirements (Republic Act 6715 and Implementing Rules), agreement of the parties (CBA and relevantagreements), directives of the arbitrator, and procedural rules of appropriate agencies like the NCMB ProceduralGuidelines in Conduct of Voluntary Arbitration Proceeding.53. Who controls the arbitration proceedings?

It is generally accepted that the conduct of arbitration proceedings is under the jurisdiction and control ofthe arbitrator subject to such rules of procedures that the parties may jointly prescribe or those which appropriateagencies like the NCMB may legally require.54. How may arbitration be initiated?

Arbitration may be initiated either by 1) a Submission or 2) by a demand or Notice invoking a collectiveagreement arbitration clause. Sometimes both instruments are used in a case. (Elkouri and Elkouri).


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55. How do we distinguish Submission from Demand or Notice to Arbitrate?Submission is sometimes called a Stipulation or anAgreement to Arbitrate. It is used where there is

no previous agreement to arbitrate. The Submission which must be signed by both parties, describes an existingdispute often names the arbitrator, procedures in the hearing and it sometimes contains considerable details of thearbitrators authority and other matters which the parties wish to control. Submission is more appropriate ininterest disputes since collective agreement generally do not provide for the arbitration of such disputes that mayarise in the future. Submission is often entered into after the dispute has materialized and the issues can already

be defined.However, Demand or Notice of Intent to Arbitrate is more applicable to rights dispute because collective

agreements are required under Republic Act 6715 to provide for a grievance procedure and a voluntary arbitrationclause with respect to disputes arising from the application or interpretation of the agreement. Thus, there is an

agreement to arbitrate future dispute that may arise under and during the term of the CBA. If a dispute iscovered by such an arbitration clause, arbitration maybe initiated unilaterally by one party by serving upon theother a written demand or notice of intent to arbitrate.56. What are some of the reasons why parties to a case may still choose to execute a submission

even if there is already an arbitration clause in the CBA? In various decided American cases,some reasons were given for doing so:

1. To expand or diminish the authority of the arbitrator provided by the collective agreement(International Shoe Co., 21 LA 550, 550-551, Roder, 1953; E.K. Porter Co. vs. United Saw, File

and Steel Production Workers, 406 F.2d 643 and District Council vs. Anderson, 104 LRRM 2188,2189)

2. To state precisely the issue to be decided by the arbitrator, and indicate the scope of is jurisdictionmore precisely (E.I du Pont de Nemours and Co., 39 LA 1083, 1084)

3. To state procedural details where the parties desire to control them and the collective agreementcontains little or no detail in regard thereto.

4. In arbitration under a law, to complete any statutory requirements not met by the arbitrationclause of the collective agreement

5. To confirm the arbitrability of the particular dispute (Kraft Foods Co., 145 LA 336)6. To provide additional opportunity to settle the dispute7. To agree to a remedy

In negotiating on a submission, the parties may find that they are not too far apart for negotiatedsettlement of the basic dispute.57. What preparations should the parties and their advocates undertake in order that they will

be able to present their respective cases and positions most effectively?To facilitate the hearing of the case, parties shall ensure the effective presentation of the facts and

arguments of their respective cases by undertaking the following preparations:1. Study the original statement of the grievances and review its history through every step of the

grievance machinery.2. Examine carefully the initiating document whether it is the Demand for Arbitration or the

Submission Agreement, to help determine with certainty the scope of the arbitrators jurisdiction 3. Review the collective bargaining agreement particularly the specific provisions involved and

other related provisions including any pertinent company policy, rules and regulations.4. Compile all documents needed at the hearing make available photocopies for the arbitrator and

the other party. Where some of the documents needed are in the possession of the other party,make arrangements to ensure availability during the hearing. Otherwise, motions for theissuance of subpoenas may be availed of prior to or during the hearing.


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5. If ocular inspection is material to the case, make advance arrangements with thearbitrator. During on-the-spot investigations, the arbitrator must be accompanied by therepresentatives of both parties.

6. Interview all witnesses and ensure that they understand the whole case and their particularrelevance and importance of their testimony to the case. Make a written summary or checklist ofthe points upon which each witness will testify to ensure that nothing is overlooked during the

hearing.7. Study the case from the other partys point of view. Anticipate rebuttal questions and prepare

to respond to the evidence and arguments presented by the other party.

8. Review articles, references and published awards/decisions and jurisprudence on the generalsubject matter in dispute

ARBITRATION HEARING58. In general, what are the procedural steps in the conduct of arbitration hearing?

Arbitration hearing normally involves many, if not all, of the following steps:1. The taking of the oath by the arbitrator and his opening statement2. Brief statement of the issues in controversy by the parties3. Stipulation of the facts4. Presentation of evidence by the grievant. The voluntary arbitrator shall have a wide latitude of

discretion in determining the order of presentation. In disciplinary cases, it is the party whodisturbed the status quo in the relationship who will present the case. In cases of contractinterpretation, the statement shall be presented first by the initiating party.

5. Presentation of evidence by the other party6. Supplementary fact-finding procedures, such as ocular inspections7. Hearings and judgment of Default8. Formal offer of evidence9. Filing of briefs and reply briefs.10. Closing of Hearing

59. Who may represent parties in arbitration proceedings?It is generally agreed that each party has the right to be represented in arbitration proceedings by

persons of their own choosing. He can be the spokesman in the prearbitral stages of the grievance procedures likethe shop stewards and foremen, top union and company officials, or company or union attorney.60. Who are entitled to attend arbitration hearings?

As a rule, arbitration hearing is not open to the public. Only persons having direct interest in thecase, that is, the parties and their authorized representatives are entitled to attend the hearing. Otherpersons may be permitted to attend the hearing only with the permission of the arbitrator or the parties.

61. Who is responsible in setting the time and place of hearing and the sending of the notice ofhearing?

Ordinarily, the arbitrator will meet at any time and place agreed to by the parties, if he isavailable. Otherwise, he fixes the time and place in consultation with the parties and gives timely and writtennotice of such date, time and place of the hearing.


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62. Is the taking of the oath by the arbitrator of the NCMB and witnesses necessary in arbitrationproceedings?

All Accredited Voluntary Arbitrators of the NCMB take their oath of office to complete their accreditationand are no longer required to do so before proceeding with the first hearing of the case.

The swearing in of witnesses is often preferred whether required by law or not. But this depends on the

Arbitrator.63. What is the importance of Stipulation of Facts? When may parties enter into such stipulation?

An agreed statement of facts expedites the arbitration hearing by reducing the number of necessarywitnesses and focusing attention on disputes on disputed issues or facts of the case. The parties at their owninitiative or upon the suggestion of the arbitrator, may enter into Stipulation of Facts before or during the hearing.

64. To what extent should arbitrator participate in the hearing?Arbitrators must feel free to participate personally in the hearing by asking questions, seeking information,

and exploring all angles which he deems necessary for a full understanding of the case. He must take the initiativein reconciling apparent contradictions or in seeking insights into the motives of those whose testimony is at odds.65. Should settlement by the parties on some or all of the issues be encouraged orallowed afterarbitration has been initiated or hearing has already commenced?

Arbitrators are encouraged under the law to conciliate or mediate to aid the parties in reaching voluntarysettlement even after arbitration has been initiated and an arbitration hearing already commenced.66. Is the arbitrator compelled to set forth the terms of settlement in an award?

Generally, when parties settle their dispute during the course of arbitration they often request that thearbitrator set forth the terms of the settlement in the award. If the arbitrator believes that the agreement isproper, fair, sound and lawful, it becomes his responsibility to adopt the same.67. Is the need for a hearing a basic requirement in all arbitration proceedings?

A hearing in the presence of the arbitrator is deemed imperative in virtually all cases. In giving each party

full and fair opportunity to be heard, the arbitration hearing simultaneously serves to inform the arbitrator fullyregarding all material aspects of the disputes. Even when the parties agree to submit their case on the basis ofstipulated facts, written briefs and affidavits, the arbitrator may not always agree that the case be properlyresolved without a hearing.

In the case of Natividad vs. Workmens Compensation Commission, cited in the paper presented by Atty.Rosa Maria Bautista during the Institute on Grievance Settlement and Voluntary Arbitration, where the Departmentof Labor held no hearing to enable it to dispose of or terminate at the quickest possible time all workmens casesfiled on or before March 31, 1975, the Supreme Court through Justice Cecilia Munoz Palma stated:

Such an argument does violence to the principle of due process which the Court must uphold at all timesespecially where substantial rights of a litigation are at stake. Expediency cannot be invoked at the sacrifice ofprocedural due process.

The due process requirement is not a mere formality that may be dispensed with at will. Its disregard is amatter of serious concern. It is a constitutional safeguard of the highest order. It is a response to mans intimate

sense of justice. It demands that government acts, more especially so in the case of the judiciary, be not infectedwith arbitrariness. It cannot be satisfied unless the elementary requirements of fairness are met.

Generally, the arbitrator must inform the parties that relevant and material evidences must be presentedregardless of the form with minimal use of technicalities.68. When may an arbitrator grant continuances or adjournment of hearing?

An arbitrator may grant continuances or adjourn the hearing from time to time upon joint request of theparties or at the initiative of only one party for good cause shown.


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Continuances are often due to the absence of witnesses or evidence and the request, even if opposed bythe other party, may be granted if such absence was not due to the fault of the requesting party.69. Are transcripts of hearing always necessary in arbitration proceedings? Who pays for the cost?

A formal written record of the hearing is not always necessary. In simple cases, the arbitrator can takeadequate notes. On contract interpretation cases, there being no disputed facts,, the arbitrators notes, the partiesexhibits and briefs ordinarily makes a transcript unnecessary. In complicated cases, however, stenographic records

will be very help if not indispensable. The transcript will aid the arbitrator in studying the case, the parties inpreparing the briefs, and the court in reviewing the case on appeal.

The cost of the transcript is usually shared equally by the parties with each party paying for extra copies itorders.70. What are exhibits and how are they offered in evidence?

They are evidence presented and preserved in written form. Each party may use a witness to identify theexhibit and to show its accuracy if the other party does not accept the same for what it purports to be. Copies of theexhibit should be prepared in advance and copies given to the other party and the arbitrator71. When may a voluntary arbitrator conduct ex parte proceedings and render default awards?

Only an unexplained failure to appear due notice, not a delay in appearance, can justify an ex parte

proceeding. The Arbitrator must proceed to hear the testimony and receive all the evidences submitted by the otherparty including those that he may require for the making of an award.72. When may plant visits by arbitrator necessary in arbitration proceedings?

A plant visit may be indispensable if the conduct thereof helps the arbitrator secure a better understandingof the case and in some cases, avoid voluminous testimony. Plant visit may be done at the initiative of the arbitratoror at the request of any party to the dispute. 73. What is the importance of opening and closing statements in arbitration proceedings?

Opening statements provide the arbitrator in brief and clear language about each partys view of what thedispute is all about and what each expects to prove by its evidence. Through closing statements, parties render areal service to the arbitrator and to themselves by careful analysis and synthesis of the important aspects of thecases, the facts proven and placing them in proper relation to the ultimate conclusion they seek the arbitrator toarrive.74.When is the hearing deemed closed for purposes of rendering an award?

Hearings are deemed closed when all evidence and arguments of the parties have been received and finaladjournment is declared. However, if briefs and other documents are to be filed after such adjournment, the hearingis deemed closed after receipt of said documents.75. When may re-opening the hearing be allowed?

Under accepted practice the arbitrator on his own initiative, or upon request of a party for good causeshown, may reopen the hearing at any time before the award is rendered. If reopening would prevent the issuanceof the award within the mandatory time limit, the hearing may not be reopened unless the parties agree to extendthe time limit.

Good cause shown include the introduction of new evidences not available during the hearing, theadmission of which will probably affect the outcome of the case, and it is shown that reason reasonable grounds

exist for its non-production at the of hearing.76. When may withdrawal of cases from arbitration be allowed?

Parties may withdraw a case through agreement. It has been suggested that the complaint usually maywithdraw the case at any point prior to arbitration hearing, but after the hearing has commenced, he may notwithdraw the case over the objection of the other party unless permitted by the arbitrator. Agreement provisionusually allows withdrawal of the case after arbitration hearing only by mutual consent of the parties.

EVIDENCE


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77. How is evidence appreciated in voluntary arbitration proceedings? Section 8, Rule VI of the NCMB Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings

states that the relevancy and materiality of the evidence presented may be solely determined by the arbitrator andhe may allow or accept evidence, the arbitrator shall not be bound by the Rules of Court pertaining to evidence.78. How should a voluntary arbitrator receive the evidence presented by the parties?

Strict observance of legal rules of evidence usually is not required but not the parties in all cases must begiven adequate opportunity to present all of their evidences and arguments. Voluntary Arbitration are well advisedto be very liberal in the reception of evidence.79. What are the common types of evidence used in arbitration proceedings?

Evidence introduced vary from case to case according to the question involved. There are however more orless specific types of evidence required for each general type of case:

1. In disputes over the setting of general wage rates the most important type of evidence isdocumented statistical and economic data on such matters as prevailing practice, cost of living,ability to pay and the like.

2. In discharge or discipline cases, the most important evidence generally comes in the form oftestimony of witnesses that will establish the facts that led to the disciplinary action. If the issue

penalty determination, the past record of performance of employee and evidence of pastdisciplinary action will be material.

3. In contract interpretation cases, the history of pre-contract negotiations and the past practice of theparties n applying the disputed provision will be important

In some cases, visual or pictorial evidence is useful. Indeed, as long as evidence fits and is relevant tothe case the unusual nature of the evidence should not bar its admission and consideration.80. Are voluntary arbitrators authorized to issue subpoena?

Republic act 6715 and its implementing rules empower the voluntary arbitrator to hold hearings, receiveand take whatever action is necessary to resolve the issue or issues subject of the dispute, x x x

Using the foregoing statement conferring broad and general powers on the arbitrator, the NCMB ProceduralGuidelines in the Conduct of Voluntary Arbitration Proceedings specifically grant to voluntary arbitrators the

compulsory power to subpoena witnesses and documents when the relevancy of the testimony and the materialitythereof have been demonstrated to the arbitrators.

A view has been expressed that Even assuming its legality, the use of subpoena is not to be encouraged.Demands for relevant information by either party should be honored without the formality of a subpoena.

81. What should be the approach of the arbitrator in giving weight and credibility to the evidencepresented?

Noted Arbitrator George Cheney pointed out that, in arriving at the truth in such case, an Arbitrator mustconsider whether conflicting statements run true or false; what he will note is the witnesses demeanor while on thestand; and that he will credit or discredit testimony according to his impression of the witnesses veracity.

He also pointed out that in determining where the preponderance of evidence lies with respect to anymaterial point, the arbitrator will into consideration whether the witness speaks from first-hand information towhether the testimony is largely based in hearsay or gossip.

In summarizing, Arbitrator Cheney stated that the duty of the Arbitrator is simply to determine the truthrespecting material matters in controversy as he believes it to be, based upon a full and fair consideration of theentire evidence, the weight, if any, to which he honestly believes it to be entitled. 82. In giving weight and credibility to testimony in discharge and discipline cases, what special

considerations should be taken into account by the arbitrator?


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In discharge and discipline cases, if there is evidence of will on the part of the accuser against the accused,the testimony of the former will be subject to doubt and careful scrutiny by the arbitrator.

In one case, Arbitrator Shulman recognized that an accused employee has an incentive for denying thecharge against him in that he stands immediately to gain or lose in the case, and that normally there is no reasonto suppose that a plant protection man, for example, would unjustifiably pick one employee out of the hundreds andaccuse him of an offense, although in particular cases the plant protection man may be mistaken or in some caseseven malicious. Arbitrator Shulman declared that, if there is no evidence of ill will toward the accused on the part of

t he accuser and if there are no conclusion that the charge is true can hardly be deemed improper.In se

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